Mapped: America’s Entrepreneurial Spirit During COVID-19
Despite the risks of opening a business during a global pandemic, new data from the U.S. Census Bureau reveals that the entrepreneurial spirit is alive and well in the United States.
In total, there were 492,133 new business applications in January 2021—an increase of over 73% year-over-year (YoY).
The region with the highest growth rate was the South at 84% with more than 220,000 new business applications in the region in January of this year. Mississippi had the highest percent increase at 164%, with over 6,000 new applications in January 2021.
Here’s a closer look at the number of total applications by state and region:
Notably, new business applications have soared in the last month or so, bouncing back from a dip between July and December 2020.
The growth rate from December 2020 to January 2021 stood at 42.6%, with the biggest change happening in the Midwest, where applications have gone up 48.6%. Here’s a look at the biggest changes in applications by region since December 2020:
|Region||Number of Applications in January 2021||Percentage Change from December 2020|
Note: Business applications are measured by collecting data on new applications for Employer Identification Numbers with the U.S. government.
Opportunity Out of Crisis
Prior to the pandemic, new business startups were actually on the decline, but in times of crisis there is often opportunity.
People have become wildly innovative during COVID-19, partly because they were forced to do so due to job or income loss. Economists call this ‘creative destruction,’ wherein new innovation springs up because of the failure of particular industries or businesses.
Here’s a look at new business applications by industry.
|Industry||Number of New Business Applications (Jan. 2021)|
|Transportation and Warehousing||41,320|
|Accomodation and Food Services||27,409|
|Health Care and Social Assistance||27,266|
|Finance and Insurance||22,607|
|Arts and Entertainment||14,407|
|Management of Companies||4,273|
Creative destruction has been keenly exemplified in the rise of remote and digital services over traditional brick and mortar stores. In fact, the industry with the highest number of new business applications in January 2021 was retail services, mostly online, with over 101,000 applications.
Feeling the Entrepreneurial Spirit?
As business applications are on the rise, more jobs could potentially be created in the U.S., and competition will likely increase as well. While starting a business during COVID-19 is risky, it could have immense payoffs for the individuals involved and the overall economy.
In fact, a piece from the U.S. Chamber of Commerce actually recommends specific business ideas that are ‘pandemic-friendly.’ Among many virtually-based ideas, the list includes:
- Digital marketing
- App development
- Fitness and wellness services
- Box subscription services
Perhaps, for digitally minded entrepreneurs, there has never been a better time to start a business.
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